Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Hayward Industries, Inc.
Global Credit Research - 27 Jan 2021
New York, January 27, 2021 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Hayward Industries, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on 22 January 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
Hayward Industries, Inc.'s (Hayward; B3) credit profile reflects its relatively small scale, and high financial leverage. As a manufacturer of pool equipment, Hayward is somewhat exposed to cyclical downturns and a prolonged weak economic environment will negatively impact demand for its products. Hayward's cash flows are highly seasonal, with most of its cash generated during its second and third quarters. The company has customer concentration, with its top customer accounting for about 26% of gross sales in fiscal 2019. Governance factors primarily reflect the company's aggressive financial policies under private equity ownership, including elevated financial leverage and shareholder distributions funded with incremental debt. Hayward's credit profile also reflects its strong market position and good brand awareness in the North American pool equipment industry, and its growing presence internationally. The company benefits from the relatively stable revenue base from its repair and replacement business, which represents about 75% of revenue, and its good EBITDA margins supported by its large aftermarket sales mix and pricing stability. We expect good consumer demand to continue into the first half of calendar 2021, supported by a solid US housing market, and continued focus on stay-at home, social distancing, and outdoor activities due to the coronavirus outbreak.
This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.
The principal methodology used for this review was Consumer Durables Industry published in April 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
This announcement applies only to EU rated, UK rated, EU endorsed and UK endorsed ratings. Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Oliver Alcantara Analyst Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 John E. Puchalla, CFA Associate Managing Director Corporate Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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